Axie co-founder: More game and less fi needed in the industry

In the Token Issue this week, we talk to Sky Mavis COO Aleksander Larsen about what’s wrong with the GameFi space and how to fix it. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Scott Shuey Crypto journalist Hi {NAME} My first game console was the [Atari 2600](. Yeah, I’m that old. I remember the 8-bit graphics, the horrible [Pac-Man port]( and I even played the disastrous [E.T. the Extra-Terrestrial video game]( on the platform. It was the first time I ever went to a store and demanded my money back. As bad as those games were, I found myself reminiscing about the “good old days'' when I spent a few hours last weekend playing Axie Infinity: Origins, the updated release of the hit blockchain game. Almost everything about the blockchain games I’ve touched is better than the games back in the '80s, except the experience of playing them. I know a lot of people still play Axie Infinity despite its reduced earnings, but I’m ready to turn it in for an [8-bit tank](. Retaining players who aren’t having fun is one of the biggest challenges for blockchain game developers. Most of these games have been boring, and everyone - including the developers - knows it. If there wasn’t money involved, few people would get into them. The problem was that for most of 2021 and the first few months of 2022, money was the only thing driving growth. Worse, developers spent too much time addressing issues with game economies instead of developing better titles. The crypto winter might actually be the best thing to ever happen to the sector - or maybe not, depending on how much ether you have sunk into the games. The headwinds are forcing developers to actually pay attention to making games that are fun to play. This is the focus of this week’s Big Story. We talk to one of the founders of Axie Infinity, Aleksander Larsen, who is determined to make [GameFi]( - a term he hates - into a sector focused more on games and less on “fi.” – Scott  ---------------------------------------------------------------  THE BIG STORY [Axie Infinity is older, wiser, and relishing its underdog status again]( No one represents the flaws of GameFi better than Axie Infinity, which is why its developer is determined to become known for “blockchain gaming” instead. We talk to Sky Mavis COO and co-founder Aleksander Larsen about what the company learned from running Axie Infinity and how the platform is now focusing on games that are fun to play, rather than (potentially) profitable.  --------------------------------------------------------------- ⭐ TO THE STARS A look at what’s pushing Web3 forward 1️⃣ Tether goes paperless [Stablecoin cuts commercial papers to zero]( Last week, Tether announced that it had removed all commercial papers from its reserves and replaced them with [T-bills](. Translation: They’ve gotten rid of the risky commercial debt and are now backing the stablecoin with AAA-rated government bonds. While Tether weathered the UST/Luna debacle over the summer with only some minor and quick deviations from its peg to the US dollar, its stability was questioned. To address ongoing concerns, Tether began reducing the commercial papers, which stood at US$3.5 billion in July. 2️⃣ Japan looks to revitalize crypto markets [Regulators loosen rules on listing cryptocurrencies]( The country’s regulators will cut the lengthy listing process for tokens, provided the coins aren’t new to the Japanese market, according to Bloomberg. The new rules could be implemented as early as December. Genki Oda, vice chair of the Japan Virtual and Crypto Assets Exchange Association, said he hoped that the move will “revitalize Japan’s crypto assets markets.”  --------------------------------------------------------------- 🌙 TO THE MOON Tokens, NFTs, and yield generators we’re noticing 1️⃣ [Huobi]( HT, the native token of the Huobi exchange, has jumped 85% over the past two weeks on reports that Justin Sun, founder of the Tron network, has taken a role as an advisor to the platform. Sun [told Bloomberg]( that he owns “tens of millions” of tokens. 2️⃣ [Azuki]( NFT project Azuki is releasing what it calls the Physical Backed Token (PBT) on Ethereum. The new token does what its name suggests - it's tied to a physical object. While physically backed NFTs aren’t new, Azuki will use a physical cryptographic chip that links the token to the object - a method that seems to be new to the market. Azuki is calling the combination “scan to own.” The project’s first NFTs will be nine golden skateboards, but anything you can attach the chip to can be used. --------------------------------------------------------------- 🌏 BACK TO EARTH The week’s biggest roadblocks Magic Eden reverses course in NFT royalties debate No good deed goes unpunished. In September, NFT marketplace Magic Eden decided to give NFT royalties some added protection. It launched [MetaShield]( a voluntary tool that allows content creators to blur or carry a watermark on NFTs that were sold or resold without paying the appropriate royalties. The aim was to protect artists, not punish buyers, according to Magic Eden. Debate - such as it is on the internet - ensued. Some argued that content creators had a right to their royalties; others argued that it was better for the industry to be royalty-free. While the debate raged on, Magic Eden noticed that its [market share was slipping](. There can be little doubt that in a crypto winter, buyers aren’t willing to accept higher costs. So Magic Eden reversed course and said it would make royalties optional, and it wasn’t the only one. DeGods, a Solana-based NFT collection, recently said it will switch to a [zero-royalty scheme](. Both joined FTX, which said in 2021 that it wouldn’t list NFTs that pay secondary market royalties to their holders. Ultimately, it seems that protecting [sales volumes]( is more important than ensuring royalties. This won’t be the end of the matter. The decision to focus on royalty-free NFTs comes from two sources: creators that deal in bulk sales, usually of the PFP variety (those used for profile pictures), and buyers who think they have a right to a better price. But this will likely be countered by a reduction in the minting of NFTs. Artists who make a living from their work are not going to supply a market that doesn’t pay for it. Artists fighting to receive royalties for their digital work is a battle as old as high-speed internet, and many are worried that a growth in zero-royalty projects will only recreate [problems last seen in the Napster-era](. There is also the question of sustainability and what zero royalties could [mean for Web3 in general](. Where will it end? Probably with new software. The problem now is that royalties are not enforceable on-chain, but it's only a matter of time before [someone finds a way to change that](. Software isn’t the only solution, either. Beeple, the popular Twitter personality, suggested [switching from a seller’s fee to a buyer’s premium](. Of course, some artists will just sell exclusively on sites they know will [protect their payments](.  --------------------------------------------------------------- STILL A PONZI SCHEME The dark underbelly of Web3 and crypto today “This story has been the talk of the @WIRED London newsroom ever since $1 billion landed in @Gmvolpi’s crypto wallet. (Gian is a person of many surprises, but this was unusual, even for him.) Enjoy the ride.” — @GregWilliams718 - [deputy global editorial director @WIRED]( Why can’t stuff like this happen to me? A reporter at Wired received US$1,112,172,834 in his wallet from Valentin Broeksmit, a notorious financial whistleblower-turned-“crypto alchemist.” Broeksmit is the definitive “degen,” a person who specializes in shit coins and other highly speculative crypto products. When your friends warn you about trading in crypto, what they mean is, don’t be this guy. Broeksmit claims he made trillions, but it turned out to all be a mirage. It’s a great story with a tragic ending. You have to read the whole thing to get all the nuance, but Williams is right: This story is one hell of a ride. To put it mildly, it also highlights a lot of what is wrong in crypto. --------------------------------------------------------------- MORE TO CHEW ON 1️⃣ [Hacker gets US$50 million “bug bounty” from Mango]( It’s official. The hacker who stole US$114 million in funds from Solana trading platform Mango Markets will get to keep US$50 million in a so-called bug bounty. *Bloomberg* reported on Saturday that a settlement had been reached, “wrapping up several days of tense negotiations between the hacker and Mango.” For returning the US$64 million, the Mango team promised not to prosecute. Mango said the funds have been returned. 2️⃣ [MetaMask allows US users to transfer funds from banks]( ConsenSys, the parent company of crypto wallet MetaMask, announced last week that it had signed a deal with Sardine, a fintech payment firm. The deal allows wallets to transfer up to US$3,000 a day directly from their banks into their MetaMask wallets. 3️⃣ [Mastercard may offer crypto services to banks]( The payments giant is launching a program that will allow banks to offer cryptocurrency services to their clients. The program will handle regulatory and compliance issues, one of the biggest concerns for banks. 4️⃣ [Chinese courts use judicial blockchain platform to store data]( A Chinese legal website posted that the Supreme People’s Court has logged more than 2.6 billion pieces of evidence on the blockchain platform. The court has been using blockchain technology since 2018.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894